A new Vancouver-based company says it aims to lessen the headache of finding rental accommodation in the city’s hot housing market, but renters’ advocates are blasting it as more bad news for tenants.
Biddwell, which officially launched last week, allows prospective tenants to review online postings and submit a “sealed offer” on a unit, similar to a bid at a silent auction. The landlord can then review the applicant’s “renter resumé” – which can include a short biography, references and verified income – and decide whether the offered amount is acceptable.
Co-founder and CEO Jordan Lewis said this gives landlords a sense of the fair market value of a property, rather than guessing or relying on comparable online postings, and allows them to get a better sense of prospective tenants.
Meanwhile, tenants can consolidate their relevant information in their renter resumé and have the added security of choosing from verified landlords vetted by the company.
“We want to give tenants the ability to stand out, much like what LinkedIn has done for working professionals – to build their renter resumé and let us know who they are as a tenant so they can share that with owners pro-actively as they apply,” Mr. Lewis said.
“And, for the first time, we want to give tenants the opportunity to speak to fair market value. Currently, tenants have no say in pricing. A lot of owners we’ve talked to actually welcome that, because they themselves don’t really know what to price units.”
The fact that the offers are sealed prevents a bidding war, Mr. Lewis said. The site also has mechanisms in place that allow tenants to report landlords who try to facilitate bidding wars.
The tenants’ offers can be below the landlord’s suggested rental rate.
“We want to eliminate any external influences, because to us, fair market value is what a knowledgeable tenant is willing to pay, unpressured,” Mr. Lewis said.
But Alvin Singh, chair of Vancouver’s Renters Advisory Committee, called the startup company bad news for tenants.
“Right there, there are tons of people competing for every single unit in this city; that’s just the reality of a low vacancy rate,” he said.
“In a scenario where there are so many people competing, it might not be an open bidding war – this is definitely not an auction – but it’s still a bidding war. Someone is going to sit there … they’re going to take a look at what the market is like and if they have the extra money, they’re going to put in an inflated bid. There’s no way that a system like this is not going to encourage rental rates to go up.”
Mr. Singh added that with loopholes such as fixed-term leases, which allow landlords to skirt British Columbia’s 2.9-per-cent annual rent increase limit, there’s a possibility that tenants will find themselves bidding on their own unit every year.
He called the service “a symptom of a rental market that’s far beyond overheated,” and called on the province to step in. The vacancy rate for purpose-built rentals in Vancouver is just 0.6 per cent.
Cass Sclauzero, the Vancouver-based renters advocate behind the @dearYVRlandlord Twitter handle, said that, while the site may prevent in-person bidding wars, she also believes the majority of landlords will still pick those who submit the highest bid.
She said she’s also skeptical of the idea that landlords will derive fair market value from sealed offers. “What landlord who can’t be bothered to set their own rental rate is interested in fairly assessing and averaging or determining the median or mode of all the bids he or she receives in order to set a fair price?”
Over the weekend, the fledgling website had 110 listings, mostly for furnished condominiums. The company said it hopes to expand to Toronto and Montreal.